Quote Adjustment Market Making Interview
Quote adjustment market making interview guide for updating bid and ask after trades, inventory changes, and new information.
Candidates practicing live market-making games.
Adjust for value, risk, or both
A quote can change because fair value changed, because your inventory changed, or because uncertainty changed. Name which one is driving the adjustment.
Trades contain clues
If a counterparty aggressively buys your ask, the trade might suggest your ask was cheap, or it might simply reflect uninformed demand. Do not overstate the inference.
Concrete example
If you quoted 98 at 102 around fair value 100 and someone buys at 102, you are now shorter the item and may revise fair value or skew future quotes upward.
Spread can change too
After new information, you might widen the spread if uncertainty rose or tighten it if the value estimate became clearer.
Keep the update explainable
In an interview, a simple justified move is better than a complicated quote you cannot defend under follow-up.
Common mistakes
Candidates often move quotes mechanically after every trade. The better answer separates inventory pressure from information about fair value.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.